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Viewpoint: Chris Thomas, Impaq Group

How the Mobile Gaming Industry is Poised for Take-off

Statistics for the growth of mobile content abound. The latest numbers from Informa Group analysts estimate that the worldwide market for mobile content will be worth approximately $42.8 billion of which $11.2 billion represents mobile gaming solutions.

Our own consumer programme study (Mobile Life 1: April 2005) identified that fewer than 9% of UK mobile owners had participated in "gaming" whilst over 81% were excited at the prospect of doing so in the future.

However, despite the facts and figures, there is no certainty as to how lucrative the mobile market will be and, more importantly, when users will cross the chasm from early to mass adoption. Nonetheless, what we are able to do is identify certain factors that will influence such uncertainties.

Consumer behaviour

Past technological revolutions have succeeded - and faltered - as a result of the behaviour of the masses, and mobile gaming is no different. Such an industry could be worth billions, but only if the consumer is willing to 'try it'. However, what's different this time round is that there is no need to educate the consumer about the benefits of mobile phones. No mobile gaming brand will need to run an advertising campaign to promote the benefits of 'going mobile' - the consumer is ahead of the game here!

According to Mobile Life 1, 92 per cent of surveyed users would not be parted with their mobile phone. This figure rises to 98 per cent for those under 34 years old and I suspect it is close to 100 per cent for those under 15! The study also showed that an astonishing 81 per cent of all mobile users are eagerly anticipating using their mobile phones to play games - it should be noted that the consumers' definition of gaming is very broad and tends to incorporate offerings such as competitions, auctions and lotteries, as well as conventional gambling.

Nevertheless, I see very little consumer resistance to mobile gaming - the necessary behaviour patterns are already established and more importantly, it is one of those rare occasions when consumers have visualised the market before the industry itself! Therefore, the challenges lie mostly with the industry and its ability to respond to consumer demand.

Operator strategy

The UK's major mobile phone operators have not exactly been accommodating towards the mobile games industry. They have continuously discouraged content providers by:

  1. not investing in/supporting the development of new games and applications
  2. demanding (and taking) a large share of revenue for hosting the games on their platforms

Two key developments are however conspiring to change this status quo. Firstly, handset penetration in the UK has reached saturation point some time ago and is now beginning to force the operators to investigate non-voice services to increase revenue and act as a differentiator to reduce churn. Secondly, new and easily downloadable technologies have emerged to offer a compelling and simple (as well as billable!) platform for the delivery of games. These developments have already had an impact - the most noticeable of which has been O2's decision to launch the content provider and user friendly, i-mode platform in the UK this autumn.

Compulsory developments

Consumers don't necessarily understand how content is delivered to them. However, thanks to the development of different 'platforms' that support and enable accessibility and user-friendliness, user experience can be significantly enhanced.

Similarly, handset innovation (including the increasing use of built-in features and easily downloadable applications) is an inherent rather than a leading factor. Technically, mobile gaming is already sophisticated and the consumer takes for granted continually improving screen quality, memory capacity and efficient access to multimedia and graphic services.

What the future has in store...

Unlike the web, which promised much but delivered slowly because it suffered from of a lack of bandwidth, the mobile phone suffers from the opposite. It has plenty of bandwidth (3G now, 4 and 5G in the next five to ten years) but it is currently short on content. However, I am convinced that, despite the 'history' between operators and content providers, the trend towards 'liberalisation' is unstoppable and will remove the biggest barrier I see for the mobile games industry in the UK, making it a resourceful and prolific arena.

Chris Thomas is Director at Impaq Group.

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